BoE left monetary policy unchanged

Bank of England (BoE) left the program parameters for quantitative easing and key interest rates unchanged, but signaled that will not decrease further the interest rates until the end of the year. The key interest rate remained at the record low level of 0.25%. However, Bank of England sighted that the rate might be changed in both directions, depending from the economy growth of the country.

BoE raised its forecast for inflation and growth in the UK. According to the renewed expectations of monetary institution, the inflation will exceed the 2% target early next year and stay above this level until at least 2019. The central bankers signaled that they can not tolerate long growth rate over 2%, but the sharp devaluation of the GBP could lead to rising inflation over the this value. BoE expected acceleration in inflation in 2017 and 2018 up to 2.7%.

Forecasts for economic growth were also increased, reflecting recent strong data from the British economy. In 2016 the UK economy will grow by 2.2%, while in 2017 the forecast for growth is 1.4%. The assessment for 2018, however, was reduced to 1.5%.